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To: Elroy Jetson who wrote (103539)	2/5/2008 10:11:23 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 306849

The bad news is that Nouriel Roubini is an economist and an academic. The good news is that this background has not prevented him from being one of the leading authorities on the economic and financial disaster that has been unfolding for many months now. While other "experts" claim to have seen things coming, he has been out there, at the forefront, sharing his thoughts for all to see (and, earlier on, getting ridiculed for daring to espouse such controversial views.) this is absolutely true, it's all in print, and on video... i remember nouriel being absolutely ridiculed by a smirking, condescending ben stein on krudblow's program early LAST SPRING when he was explaining the dire scenario of the subprime debacle...i think i even posted a comment here about it at the time... well, anyone who had listened and acted upon nouriel's analysis is probably considerably wealthier today, and of course, if you accepted the shill and tout 'goldilocks' meme, you've been hosed... scary thing is i saw ben stein tonight and he finally is coming around to the bearish camp....time to buy?????? nah not yet

To: Elroy Jetson who wrote (103539)	2/5/2008 10:11:24 PM
From: MulhollandDrive	Respond to of 306849

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To: Elroy Jetson who wrote (103539)	2/5/2008 11:05:28 PM
From: ChanceIs	Respond to of 306849

>>>Why did the Fed ease the Fed Funds rate by a whopping 125bps in eight days this past January?<<< Per John Mauldin: In The Financial Times today the inside headline is "Markets ask if the Fed was duped?" It seems that a rogue trader (interesting how a lone trader who loses a lot of bank money is always a rogue) lost Societe Generale $7.1 billion (4.9 billion euros). .... Everywhere I went I was asked, "Why an inter-meeting cut?" The Financial Times wrote, "The question being asked now by some in the markets is: was the Fed duped into a clumsy and panicked move by the clean-up operation for Jerome Kerviel's [AKA rogue trader at SocGen] mammoth losses for the French bank?" My very good friend Barry Ritholtz seems to agree with that position. He was on CNBC with Steve Lissman and Rick Santoli and they suggested that the Fed responded to the volatility in the stock markets with the rate cut and that the Fed is now responding to the traders in the S&P futures pit. ...... And, having been rewarded for their past tantrums, the market will now be screaming for another 75 bps next week. As Rick Santelli appropriately observed, the Pavlonian training is now complete." I don't agree with that assessment, and Barry is not so thin-skinned that he will worry about my having a different view. So, let me throw out another scenario. ..... Then what was the reason for the cut if not stock prices? Why an inter-meeting cut much larger than the market was expecting next week, just seven days later? What was so urgent that we needed a shock and awe rate cut a week early? I am not sure if panic is the right word, but I think very deep concern is also a little understated. It has to be something serious for an inter-meeting cut. Looking around for problems I came up with the following thoughts that I shared with investors and managers while here in Europe. .......................... I think the concern that there is the potential for a much worse credit crisis than we are currently experiencing is what is driving the Fed. They are looking at the problem from the inside, and realize that they simply have to engineer a much steeper yield curve to allow the banks to make enough profits so that they might be able to grow their way out of the crisis over time. If I am wrong and the Fed was responding to the stock market, then we will likely not see a cut this next week. But if we get another 50-basis-point cut, as I think we will, then it means the Fed is responding to concerns about the credit crisis. And we will get another cut the next meeting and the next until we get down to 2% or below. A 50-basis-point cut takes the rate to 3%. It they had cut the rate by 1.25% next week, the market would have collapsed. Better to do it in two leaps is what I think they are thinking. We will see. And it is not just the Fed that is concerned.